Abstract

The subjective well-being approach to environmental valuation is applied to analyze the valuation of greenhouse gas emissions. Dimensions like population and income are then incorporated into the valuation to get the fairness-adjusted marginal value of emissions. The results indicate that the industrialized countries have high willingness-to-pay to reduce emissions with the United States and Japan reporting the largest figures. Developing countries differ in their valuations, albeit they are not subject to the mandatory reductions of emissions, but still the results indicate that poor countries like China and India indicate willingness to pay whereas Brazil and Mexico indicate willingness to accept payments to reduce emissions. The high willingness-to-pay indicated by the industrialized countries does not imply that they can pay off the developing countries to continue emitting as usual. However, the different modes of willingness-to-pay and willingness-to-accept of countries indicate possibilities toward the formation of an inter-group payments and transfers system to allow societies to contribute toward global reduction emissions reduction. Part of the payments from the industrial countries could be used to support global programs to change the patterns of production and consumption and accelerate the development of cleaner technologies.